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Investors looking for stocks in the Electronics - Manufacturing Machinery sector might want to consider either MKS Instruments (MKSI) or Entegris (ENTG). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, MKS Instruments has a Zacks Rank of #2 (Buy), while Entegris has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MKSI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
MKSI currently has a forward P/E ratio of 16.75, while ENTG has a forward P/E of 34.51. We also note that MKSI has a PEG ratio of 0.62. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ENTG currently has a PEG ratio of 1.70.
Another notable valuation metric for MKSI is its P/B ratio of 2.98. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ENTG has a P/B of 4.28.
These metrics, and several others, help MKSI earn a Value grade of A, while ENTG has been given a Value grade of C.
MKSI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MKSI is likely the superior value option right now.
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MKS Instruments, Inc. (MKSI) : Free Stock Analysis Report
Entegris, Inc. (ENTG) : Free Stock Analysis Report